Challenger banks could be seen as one of the main figure heads for the FinTech sector, and the sector has been growing at an accelerated rate.
Last year, a total of $4.5bn was invested around the world into the WealthTech sector, which challenger banks fall under. Challenger banks were responsible for $1.8bn of this, according to FinTech Global data.
The sector looks to have upped its game with a number of challenger banks making significant achievements this year. The German digital bank N26 raised a $470m Series D earlier this year, increasing its valuation to $3.5bn, while US-based Money Lion collected $160m in its Series C.
Challengers around the world are making a lot of noise, but here are just 5 stories from the week.
N26 launches into Switzerland – it’s 26th market launch
The German challenger bank entered the Swiss market earlier this week giving customers access to its banking app. The account provides customers with five free withdrawals each month within the Eurozone, with no foreign exchange fees on card payments across the world, regardless of currency.
Consumers that use iOS will also be able to use N26 with ApplePay.
Its aim is to support those which frequently travel within the European Union, those living near the Swiss border or people with high fees on euro bank accounts, it said.
N26 general manager for DACH Georg Hauer said, “We’re really happy to present a mobile banking offering in Switzerland that works not just here, but also well beyond the borders of the Eurozone and in Switzerland. Our mission is to become the most popular euro currency account in Switzerland. Additionally, with Apple Pay, N26 customers have access to an easy, secure and private way to pay in stores, apps and on the Internet via Apple devices.”
There are over 20,000 people on the waiting list for the launch in Switzerland. According to the company, participants living near the border or in large cities like Zurich, Basel, and Geneva had high interest in a euro-denominated bank account which would streamline payments within the EU.
The launch in Switzerland comes less than a month after it launched its services into the US.
Lunar Way selects Nets to support its payments
Denmark-based challenger bank Lunar Way continued its growth by partnering with the payments company Nets. Its deal was formed to improve its payment services for private and business users in Denmark, Sweden, and Norway.
In addition to improve payments, the bank will use Nets to access electronic signature services and card fraud management.
The partnership comes hot off the heels of Lunar Way’s €26m funding round which was led by SEED Capital. Lunar Way is relatively new to the market, only being founded in 2015. Earlier this month, the challenger received its European banking licence from the Danish Financial Supervisory Authority.
It offers banking solutions such as multi-currency cards, insurance, loans, and payments to consumers in Denmark, Sweden, and Norway.
Arival Bank has raised £1.87m in a pre-Series A equity crowdfunding campaign
Singapore-based Arival Bank raised £1.87m in a pre-Series A round through a crowdfunding campaign on the Crowdcube platform. The round was backed by 860 investors and surpassed its initial goal of £700,000.
The company differs from offers by stating that is does not want to be labelled as a neobank or challenger bank. Instead, it wishes to be known as a FinTech bank that exists as a licensed bank with compliance and technology at its core.
To separate itself from others, it aims to be fully cashless, open to blockchain and crypto-based business, and will solely focus on underbanked SMEs.
Digital retail bank Kuda raise $1.6m in a pre-seed funding round
Kuda, a challenger bank based in Nigeria, closed its pre-seed investment round on $1.6m. The close came shortly after it released the beta version of its online mobile finance platform and receiving a banking licence from the Nigerian Central Bank.
The company is planning to use these funds to support the development of its platform and will launch a live version of its system by the end of the year.
According to the company founder, Kuda has become the sole digital-only bank in Nigeria with a standalone licence.
Puerto Rican challenger bank Zenus Bank pics NICE Actimize for its AML protection
Zenus Bank is a Puerto Rican neobank which is looking to launch its service during the fourth quarter of the year. To ease its launch, the company has teamed up with NICE Actimize for its autonomous financial crime management.
The partnership will see a cloud-focused financial crime strategy implemented for anti-money compliance and enterprise fraud protections.
Zenus Bank chairman and founder Mushegh Tovmasyan said, “Beyond first-mover advantage, we are creating a new marketplace which will provide first-world banking products to most of the world’s population from outside their country of residence or incorporation.
“With such an ambitious objective, Zenus Bank has made safeguarding future customers and strict adherence to global regulatory compliance a priority in the early-stage development of its global banking services offerings.
Zenus had received permission to act as a bank earlier in the year, helping it to meet its gaol of enabling remote banking access for people around the world.
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